Nobody likes to hear, “We told you so,” but …
For years, the Grassroot Institute had been warning state and county policymakers that their approach to spending and taxation was unsustainable, and that Hawaii was unprepared for a major crisis, whether economic or natural.
Well, that crisis finally came, and we were unprepared for it.
Six months after declaring a public health emergency and shutting down much of Hawaii’s economy, the state’s finances are in total disarray. The Hawaii Legislature raced through its rainy day fund, then borrowed record amounts of money to keep operating. As we noted at the time, state lawmakers appeared to be wearing rose-colored glasses, borrowing as though the financial downturn had never happened, or at least would be short-lived.
Months later, the state’s leading industry, tourism, is a dim memory; businesses have been closing in record numbers; and unemployment is rampant. Not helping is that the governor back in March suspended the state’s open-meetings and open-records laws, making it hard for the public to know why their actions are being curtailed in so many seemingly arbitrary ways.
In short, Hawaii is in chaos, and if our policymakers don’t take strong action soon, things will only get worse.
With the ship of state obviously sinking, several state directors already have jumped overboard. Scott Murakami, director of the state Department of Labor and Industrial Relations, resigned Aug. 5. Pankaj Bhanot quit as human services director on Aug. 31. And Bruce Anderson, state health director, and Nolan Espinda, director of public safety, announced Aug. 31 they would be retiring in September.
That’s not all. On Aug.19, the governor announced that State Epidemiologist Dr. Sarah Park would no longer be involved in the state’s contact-tracing program. Two days ago, the official chosen to take charge of that program asked for a leave of absence until “chain of command issues” could be sorted out. And just yesterday, the state Health Department announced that Park herself would be taking a leave of absence, for reasons it did not explain.
Obviously, things are not working out so well. The state and counties have been trying their misguided best for half a year to combat the spread of the coronavirus. Instead, they have stopped the spread of economic health and prosperity, which down the road could be more of a health threat to Hawaii residents than the coronavirus.
And it doesn’t seem as if a course correction will be coming any time soon.
Ideally, the state and counties would have enacted safeguards years ago. They could have implemented a meaningful spending cap, saved the surplus and reformed public employee pensions to bring the state’s unfunded liabilities under control.
Even as recently as this past spring, when it was clear that it would take years for the economy to recover, the Legislature could have chosen a more fiscally responsible path, by cutting spending, delaying raises, putting off new public works projects, and saving some of the rainy day fund.
But nooo …
Which means now is the time to throw a lifeline to Hawaii’s economy. We need a big dose of economic freedom to revive local businesses and get people back to work.
As we outlined in our “Road map to prosperity,” issued way back in May, there are dozens of measures our state and county lawmakers and administrators could adopt to rescue Hawaii’s economy in the short run and ensure that it excels beyond that.
Admittedly, things look pretty bleak. But it’s not too late for real, substantive change. By embracing the principles of economic freedom and fiscal accountability, we can weather this storm and position ourselves to better handle future public emergencies.
If that were to happen, then it would be a pleasure for us to say, “We told you so.”